With Dolans at helm, Cablevision will be fine without Rutledge

Steve Donohue, FierceCableWhile Cablevision now operates one of the most advanced cable systems in the country, the MSO was once criticized for lagging behind its colleagues at Comcast, Time Warner Cable and other cable MSOs when it came to rolling out digital cable.

News of the exit of Chief Operating Officer Tom Rutledge brought to mind an interview I did with Cablevision CEO Jim Dolan and Chairman Chuck Dolan in May 2000, four years before Rutledge joined the company. I visited their offices in Bethpage, N.Y., with my former Multichannel News colleagues Marianne Paskowski and Mike Farrell, and we spent much of the interview grilling the Dolans on why they were the last major cable MSO to introduce digital cable.

While Cablevision was the late to the game when it came to deploying digital set-tops, the Dolans were already envisioning the day when they would deliver advanced products like home security and interactive TV programming and advertising to cable subscribers. "I think you're going to see a connection to the home, in terms of the home network and the establishment of an operating system for the home via the set-top box. That will probably be the key component of the box as you look out in four or five years--the connection of broadband into a home network and operating system, which then goes and does things in the home, like home monitoring," Jim Dolan said.

Cablevision now leads the cable industry when it comes to penetration of advanced digital cable services. About 95 percent of its customers take its iO: Interactive Optimum digital-cable service.

Not long before our interview in 2000, Jim Dolan turned some heads in the cable industry when he predicted that the company would some day generate $500 per subscriber. While Cablevision hasn't yet reached that level, it leads the industry with average monthly revenue per subscriber of $153.97. And with Cablevision pursuing new technologies such as t-commerce, which would let subscribers buy products with a few clicks of their remotes, the company could hit that $500 mark one day (increased fees for sports rights and retransmission-consent could also help drive increases in subscription fees).

"As soon as you start moving away from video and you're into telephone and into Optimum Online [Cablevision's high-speed-data service], and you begin to do some level of electronic commerce, who knows what else you may do," Chuck Dolan said in our interview.

Cablevision stock is taking a hit on Wall Street today, on news that Rutledge will exit the company. While Rutledge was an asset for Cablevision, the MSO has already has a network in place that is poised to deliver new advanced digital services such as its remote-storage DVR and t-commerce. Perhaps the Dolans will take a more active role at the cable operation, following the exit of Rutledge. That would help, not hurt, Cablevision. --Steve